Visible YoY Increase in Internet Subscriptions

The latest data
released by the NCC, the industry regulator, show that internet subscriptions
stood at 104.6 million in August, representing y/y growth of 14%. The figure
implies density of 57% in a population estimated at 185 million, placing
Nigeria well above the African average of around 16% as indicated by McKinsey.

In
August there were 957,000 new internet subscriptions recorded, compared with
867,000 the previous month. The m/m increase recorded in total internet
subscriptions could be loosely linked to increased patronage of dual-SIM mobile
phones; sometimes both SIMs are connected to separate data packages.

MTN
accounted for the largest share (38%) of total subscriptions. Meanwhile,
Globacom and 9Mobile accounted for 26% and 10% respectively. The latter
recorded a m/m decrease of -1.2%.

Since
August 2017, 9mobile (formerly Etisalat) internet subscription has declined
successively. It recorded 126,000 losses in August, compared with -218,000 the
previous month. According to some subscribers within the network, service has
slipped but remains relatively stable.

Nigeria’s
internet presence is heavily dependent upon mobile services, particularly in
the rural areas that have some exposure to the internet. The FGN targets
broadband penetration of 30% by end-2018 (from the current 22%). We understand
that the FGN has approved deployment of 18,000 kilometres of fibre cable across
specific states. Nigeria currently has about 38,000 kilometres of fibre (32% of
total requirement).

Huge
investments in telecommunications infrastructure are required to drive
broadband availability, accessibility and affordability in Nigeria. Typically,
the average cost of a monthly data package is N5, 000, which accounts for 28%
of the national minimum wage.